Common mistakes to avoid during property registration

After a property sale or transfer, the owner must fulfil a legal obligation: register the property. According to Section 17 of the Registration Act, 1908, property registration is a legal procedure in which property documents, such as the sale deed, must be registered with the local government authority. It gives the transaction legal validity, and the registered document serves as proof of ownership, thereby preventing property disputes. Buyers must carefully complete the property registration process. Any mistake on the buyer’s part or errors in the details recorded by officials can create problems, including ownership issues, legal complications, and penalties. However, the government provides a facility for rectifying such errors. In this guide, we discuss the common mistakes to avoid during the property registration process.

#1. Not verifying title and ownership history

Ensuring the property has a clear title is one of the initial steps in a homebuying journey. A property with a clear title means it has no encumbrances, liens, claims, or disputes over ownership. Transfer ownership of such a property through sale or another method will not pose any problems. Many property buyers ignore the need to verify the title and ownership history of properties and, as a result, face legal issues. Some of the problems a buyer may face due to not verifying the property title are:

• Legal disputes with other individuals over property ownership
• Difficulty in securing home loans, including rejection of loan applications
• Property-related frauds resulting in financial losses or legal hassles
• Difficulty in selling the property due to a lack of title clarity
• Non-compliance with government regulations (in case of a lack of relevant documents)

Buyers must check the mother deed, which is a record of the property’s complete ownership history. An encumbrance certificate is another crucial land ownership document. In addition to these, buyers must also check the original sale deed, builder-buyer agreement, property tax receipts, etc.

#2. Neglecting legal due diligence

Legal due diligence is a must during a property purchase. While it encompasses the verification of property title and ownership, the scope of legal due diligence is much broader and includes property inspections and regulatory compliance checks, including RERA registration verification.

Most buyers do not realise the importance of a lawyer when buying a house. An experienced property lawyer can help a buyer validate the legal aspects throughout the buying journey, from initial document verification to payments and post-sale processes.

Ensuring all necessary approvals and NOCs from relevant authorities are in place ensures a hassle-free buying process, but many skip this step. Documentation such as an approved building plan, completion certificate, and occupancy certificate ensures compliance with government regulations. Moreover, lawyers can help vet property documents, thereby helping the buyer avoid potential fraud. They can also help verify the seller’s identity to safeguard the buyer against fraud.

Further, if the property seller has appointed someone else to handle the transaction, a lawyer will help verify the Power of Attorney (PoA). Moreover, for inherited properties, the legal risks are higher. So, taking legal help is a wise decision.

Click to read about the laws related to property registrations in India

#3. Not preparing for legal issues and property disputes

When purchasing a property, especially resale homes, buyers need to perform thorough checks to know if there are any potential claims or chances of disputes between the co-owners. This situation may arise in case of inherited or ancestral properties, properties going for division after divorce or family settlement, etc. If the legal heirs or co-owners have not provided their consent to the property transfer, it will lead to future claims or other property-related disputes. All these can delay the property registration process. Hence, buyers should verify inheritance-related details, including minors who may have rights over the property. 

#4. Incomplete or incorrect documentation

Lack of relevant documentation can lead to problems or delay the property registration process. Buyers should carry the following documents to the sub-registrar’s office:

• Identification proofs, address proofs
• ID and address proofs of witnesses
• Passport-size photographs
• Appointment slip
• E-challan receipt
• Original sale deed
• Title deed
• NOCs, as applicable
• Completion certificate
• Encumbrance Certificate
• Mutation records (for resale properties)
• Power of Attorney, if applicable
• Home loan documents

Property buyers should ensure they provide the correct information during the registration process. Issues may arise due to mismatches in names across documents, signature issues, or incorrect property location details, such as plot numbers. Buyers should also know that there is a legal process to correct errors in property documents. This is done through a rectification deed.

In case of inherited properties, a will is a crucial document that helps verify the rightful ownership over the property. Unregistered wills, although legally valid, may be challenged by legal heirs. Thus, buyers should insist on probate of a will issued by the court.

Issues related to property fraud are quite common. Click to see some useful tips to identify fake property papers.

#5. Overlooking survey and boundary verification

One of the common reasons for property disputes is a lack of clarity about boundaries. Property surveys are undertaken to define property boundaries, and the process involves the use of precise measurement tools and technologies, such as drones, to ensure data accuracy. Most buyers ignore the need to verify and match the property or plot’s physical boundaries using official land survey records. This can lead to legal hassles, including ownership disputes.

The solution is easy. The buyer can approach a government land surveyor to inspect the plot/ property and verify the details against the survey numbers. During the survey, issues such as encroachment and mismatches in physical layout, area, or dimensions can be identified. In case of any discrepancies, the buyer will have clear information and can decide whether to proceed with the purchase.

#6. Not estimating property registration costs

A buyer incurs costs during the property buying process. Stamp duty and registration charges form a significant part of a buyer’s overall property purchase costs. The stamp duty and registration fees are determined by the state government. So, the charges may vary from state to state. Moreover, these charges are based on the property value, either the circle rate/ready reckoner charges (which minimise the property value set by the government) or the sale price. Hence, the costs a buyer incurs will depend on the property price. Underestimating these costs can create problems for the buyer and it can lead to delays. As a smart buyer, it is essential to be aware of the latest ready reckoner/circle rates in the area where one plans to buy property. And buyers should estimate the property registration costs beforehand.

#7. Avoiding or delaying property registration

Most government processes have a specified timeline, including property registration. Typically, the property registration should be completed within 4 months of the date of execution of the sale deed. Property buyers must register the property within the specified timeline in accordance with the Registration Act of 1908. It is only after the completion of the registration formalities that the buyer will be recognised as the legal owner of the property. By not complying with this legal requirement, a buyer can face consequences such as loss of legal ownership, rejection of a home loan, and penalties.

As part of the property registration process, buyers must physically visit the sub-registrar’s office with the seller and witnesses. Biometric verification, among other things, is carried out. Hence, one should be aware of the entire property registration process to avoid any last-minute hassles.

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Property registration provides legal validity to a property transaction and enables a buyer to secure legal ownership over the property. From major mistakes to minor oversights, buyers should be extremely cautious about the things they must avoid. Completely relying on real estate agents is not a good idea. It is important to be personally involved in the document verification process and other formalities as part of the property registration process. Moreover, after a property is registered, buyers should maintain copies of the registered documents – both physical and digital, including receipts. These records are necessary for future reference, including loan applications and reselling the property.

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